Why 3PLs Are the Missing Answer for Returns Management

Many businesses struggle to manage their returns efficiently. The reverse logistics process can eat up a lot of time and money (both from shipping costs and labor involved in processing returned inventory). Managing returns in-house might make sense for a smaller company without huge order volumes, or for giant businesses with their own established logistics networks.

But for companies between those two scenarios, outsourcing the returns process makes more sense than trying to go it alone – especially during peak seasons.

Why 3pls are the missing answer for returns management

Why An Efficient Returns Management Process Is Crucial

No business likes getting products back from customers, but it’s all but inevitable – especially with more and more sales happening online. Retail Dive reported in 2022 that online retailers have reached a 20% return rate, more than double the 9% rate for brick-and-mortar stores.

How a retailer handles those returns can mean the difference between scoring more business, or losing that customer forever. Regardless of the store’s return policy (no-questions-asked refund, free exchanges, etc.), the process of actually getting an unwanted product from the customer back to the warehouse has a big impact on how that customer views the business.

This even affects a customer’s decision to buy from that business in the first place. According to Forbes, shoppers make at least some buying decisions based on a retailer’s return policy. But with freight and labor costs soaring, there’s a delicate balance between keeping customers happy and minimizing the bite out of revenue that returns can take.

Make your reverse logistics process as streamlined and automated as possible to cut costs while preserving customer satisfaction. You may find this difficult if you’re in that in-between space of too much volume but too small a logistics network for efficient in-house management.

Outsourcing Reverse Logistics to a 3PL Is the Answer

Putting returns management in the hands of a 3PL partner is an ideal solution for businesses having trouble keeping up – especially if they’re already using 3PL services for their outgoing orders. Partnering with a 3PL offers a business:

  • Established logistics processes. Because logistics is all they do, 3PLs are better positioned to help their customers manage both fulfillment and returns faster and more efficiently. 
  • Scalability. Keeping enough warehouse space available for holiday shopping or other peak seasons just isn’t feasible for many businesses, especially with the added uncertainty of space needed for returned products. Partnering with a 3PL allows easy scaling of warehouse space to match inventory levels. This ensures the retailer has enough space for product on hand and returned items, without overpaying for unneeded space.
  • Better reverse logistics rates. By helping their customers get better return shipping rates, 3PLs provide the ability to give end consumers the cheap or free return shipping they demand.
  • Technology access. Using a powerful software platform to track returns and analyze return data helps 3PL customers not only provide better customer experience, but ensure returns are processed and inspected quickly. This speeds up turnaround for resales, which help mitigate the cost of each return.

That final point is key – without a good technological backbone, returns require too much manual input and handling to be cost effective for either the 3PL or the customer.

Does your 3PL need a little tech help?

The Octolan Technology Returns Management Platform gives both you and your clients better visibility into their returns. It also helps your team get more done with guided workflows and a super-fast 2D scanner-based return feature. 

If you want to help your customers turbocharge their returns management process, get in touch today to request a demo.

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